Utilizing the access value of customers |
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Authors: | Puqing Lai |
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Affiliation: | Ronald Coase Center of the Study of the Economy, & China Academy of West Region Development, 15th Floor, CAWD Building, Zijingang Campus, Zhejiang University, 310058, China |
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Abstract: | Customers are critical resources for the success of any business, not only because they bring in sales and profits directly, but also because of their access value in a world that is becoming increasingly interconnected. However, the mechanisms by which the customer access value may be exploited and the implication for management has not been well understood. Access value can be defined as the worth of utilizing patrons for further marketing and sales of value-added or third party products. The access value, which mainly results from the aggregation of the customer base and customer data, is essentially a corporation's internalized asset. This article shows that the size of the customer base and the extent of engagement have a significant impact on the customer access value. To develop and gain the benefits of customer access value, traditional business models often need to be transformed: firms and platforms should provide free or subsidized products to attract people and then embed value-added products to make money. The success of the new business model depends on not only the right pricing and product strategies, but also an embedding strategy. |
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Keywords: | Customer value Customer access Customer data effect Network externality Envelopment attack Embeddability Business model |
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